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Rent or Buy – What’s Right for You?

February 27, 2017

Which house is the “one”? Is this the best location? Are the schools good enough? These are all questions you ask yourself when buying a home. But, there’s an important question you need to ask yourself before thinking about the rest.

Should I rent or buy a home/apartment?

Everyone’s situation is different but 9/10 times, it makes sense to purchase a home or apartment. We’ve outlined the benefits of each option, and how to decide what is right for you.

Renting:

1. Low initial costs

Renting an apartment often requires a security deposit, but the amount can be minuscule compared to a down payment on a home.

2. Little to no responsibility

The benefit, and downfall, to renting a home or apartment is your landlord. Your landlord can be your best friend, or your worst enemy. It is the landlord’s job to help with (almost) anything that goes wrong, so you aren’t financially responsible.

3. More flexibility

You aren’t stuck forever in an apartment. Sometimes you may have to pay to break a lease, but you don’t have to worry about making arrangements for what to do with your apartment. If you need to move, you can with little hassle.

These reasons may seem appealing, but when thinking about a long-term decision, it’s time to think about ownership.

Buying:

The advantages to buying a home or condominium are surprisingly monetary. Here are some benefits of home ownership:

Pros:

1. Numerous tax breaks

When you own a home, you benefit from a mortgage deduction, closing cost deductions, and a deductible property tax (Forbes).

If you’re unsure how much you may benefit from purchasing a home, The New York Times built a calculator that will help determine your savings based on factors like how long you’ll live there, your mortgage rate, and additional factors.

2. Holding assets

The money you’re spending is going towards an asset. When you rent an apartment, you are arguably throwing away money. You can spend thousands and thousands of dollars with an apartment and have nothing to show for it. With a home, you are building an asset. Homes, traditionally, appreciate in value. So you are growing your investment over time.

3. More flexibility

Yes, this is also listed as a benefit to renting, but you have a different kind of flexibility with home ownership. You have the power to do anything to your home! There are far fewer rules that homeowners have to follow, so you can truly make your house a home.

It’s important to think about buying a home as a long-term investment. If you’re moving to a city for a year at most, maybe buying doesn’t make sense. But before you make the decision, sit down with a real estate agent and decide what is best for you!